Merrill losses dwarf estimates

Merrill Lynch is to raise $8bn of fresh capital after it announced quarterly losses that dwarfed the sums expected by financial analysts. The bank revealed it had write-downs of $9.7bn while most analysts had expected the figure to be $6bn at most. As a result of these bad debts, Merrill reported at pre-tax loss of $4.7bn.

As anticipated, the bank is to sell back its 20 per cent stake in financial news and information company Bloomberg, raising $4.43bn. It will also sell a controlling interest in Financial Data Services, valued at more than $3.5bn.

The news came yesterday on the first anniversary of the collapse of Bear Stearns, the event that kick-started the credit crunch.